Organic food is one of the fastest growing sectors in the food industry overall, experiencing double digit growth in most developed markets compared with a 1-2% growth rate for conventional food products. The global demand is on the increasing side due to the felt need of parents to feed their babies with healthier foods. These organic baby foods cost more when compared to the normal baby food available in the market, but considering the fact that these foods have a “feel good” factor, parents are willing to pay the difference. Also, the market potential for organic products is likely to be greater in markets where demand for organic baby foods is being driven by:

growing consumer concern about chemicals in baby food;

baby health consciousness;

specific dietary and allergy conditions;

the perception of organic tasting better; and

the desire to get ‘back to “basics.”

According to a new market research study from Innovative Research and Products (iRAP) titled “Branded Organic Baby Foods: New Developments, Global Industry & Market Analysis” the global market for organic infant food would have reached $760 million in 2007 and will increase to $2.26 billion by 2012. Off the seven types of organic baby foods analyzed, infant formula constituted around 38% of the organic baby food products, followed by organic fruits and vegetables, for the year 2007. The report predicts a similar kind of trend for 2012, along with a sharp increase in the total market for organic baby food products, with an annual average growth rate of around 23.8%.

In terms of identifying market prospects, the report concludes that the key driving factors of global demand are: population; consumer affluence and sophistication; degree of environmental and health consciousness; the safety and integrity of local food supply; and the availability of a local organic industry supply chain. The key constraints to the growth of the organic export industry are: lack of consistent product supply and year-round availability; the price premium, poor eye appeal and shelf presence; inconsistency of product quality; short shelf life; distance to market; and lack of consumer confidence in the authenticity of labels.

The survey identifies the market leaders. Ten leading manufacturers constitute more than 80% of the organic baby food market.

The study further concludes that Europe and North America will continue to be the largest two markets for organic baby foods, due to increasing awareness of health and environmental issues. The report also concludes that prospective markets for organic baby food products will be in Japan, Continental Europe, the United Kingdom (UK), the US and Southeast Asia. In the long term, China and other southeast Asian countries will also emerge as growth markets.